Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses personal income and consumer sentiment.
- To attain a better understanding of the borrowers impacted by the reduction of the conforming loan limits in high cost areas, NAR Researched looked at FHA purchase originations data reported for the portion of 2011 prior to the change in the loan limits (e.g. January 1st through September 30th).
- Data from FHA’s Single Family Snapshot (loan amount, product type, and contract rate) were coupled with assumptions about the amortization period, debt-to-income ratio as well as insurance and taxes (30 years, 28%, and 1.5%, respectively) to estimate the household incomes of affected borrowers.
- The vast majority of borrowers, 84%, who used a loan above the new conforming limits prior to October 1st, had a household income below $150,000.
- To read the complete new “Impact of New Conforming Loan Limits” survey, click here >
Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights personal income and consumer sentiment.
- Many REALTORS® have designations in the field to help them stand apart from their colleagues. There are 17 designations in the field of real estate and 36 percent of members hold at least one designation.
- The most common designation is the Graduate REALTOR Institute (GRI) – 21 percent of members hold this designation. The Accredited Buyer Representative (ABR) and Certified Residential Specialist (CRS) are also common designations.
- Income differs among those who have a designation and those who do not. Those with at least one designation had a median gross annual income in 2010 of $49,300. Those who did not have a designation had a median gross annual income in 2010 of $26,900.
- For more information on the Member Profile, click here.
The tough economy and the high unemployment rate have provided little opportunity for wage increases in the past two years. The hourly earnings of those workers in non-supervisory positions have risen by 2.3 percent from one year ago to July. That is a full percentage point below the 20-year average in annual wage increases of 3.3 percent.
At the same time, the costs of purchasing day to day items have been rising recently, despite the economic weakness, due to plenty of printed money. The most recent consumer price index rose by 3.6 percent from one year ago to July. In short, Americans are falling behind in their standard of living. For the next two years at least, it is unlikely that wage growth will increase in any measurable way. Consumer prices, however, can quickly change along with swinging oil prices. If oil prices were to fall by another 10 to 20 percent to about $70 per barrel, then it is possible for consumer price inflation to retreat below wage growth.
Unemployment, as terrible as it is, impacts about 10 percent of the workforce. Wages and inflation, however, impact 90 percent of the workforce. That is one key reason why consumer confidence is struggling to recover.
Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights personal income.
Every week the Research staff analyzes key data releases and explain what they mean for you and your business. In this update, we give the highlights of the most important data releases for the week of June 27-July 1, 2011, along with graphs that show the latest movement and overall trends.
Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights personal income and the savings rate.
- The primary motivation to purchase a home varies between home buyers with an income below $175,000 and those with an income above $175,000.
- The primary reason among buyers with an income below $175,000 to purchase a home is the desire to own a home. A significant motivation for buyers with an income above $175,000 is the desire for a larger a home or a job-related relocation.
- The area purchased by households with an income below $175,000 and an income above $175,000 remained relatively the same. Over half of both income groups purchased their home in a suburb/subdivision. Eighteen percent of home buyers with an income below $175,000 purchased a home in an urban area, which was slightly higher than those with an income above $175,000.
- For more information on the Profile of Home Buyers and Sellers go to: http://realtors.org/research/research/home_buyers_sellers_maps
Jobs and Income in 2011: Edging Up
There are some markets with fewer jobs this year compared to last, a situation which is not helping the local housing market despite very high affordability conditions. However, there are also many markets that added jobs on net over the past 12 months. In fact, in total there are 1.3 million more jobs in the country as measured by asking companies about their payroll count – which is known as payroll employment. By another measure, taken by asking households whether they are working or not, there are 360,000 more people working – which is known as household employment. However, even in the job-creating markets, consumers have been hesitant to make a major purchase like buying a car or a home. Nonetheless, continuing job additions in the aggregate should lead to higher home sales at some point.
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